Final answer:
Specialization and trade allow individuals and producers to focus on creating goods where they have a comparative advantage, leading to increased productivity, learning and practice gains, and economies of scale. This makes trade mutually beneficial, even when one producer is more efficient, by maximizing overall production and enabling access to a greater variety of goods.
Step-by-step explanation:
Specialization and trade benefits individuals even when one producer could produce a good more efficiently because it allows for an increase in overall production and efficiency. Specialization enables workers and firms to focus on the production of goods for which they have a comparative advantage, which refers to the ability to produce a good at a lower opportunity cost than others. Additionally, with specialization, businesses can improve their productivity through learning and practice, and also achieve economies of scale, which reduces the average cost of production as the level of output increases.
When individuals or countries concentrate on producing goods in which they have a comparative advantage, trade can be mutually beneficial, allowing each party to enjoy a greater variety of goods and services than they could if they tried to produce everything themselves. This division of labor helps to counteract the problem of scarcity by maximizing the production potential within a community or an economy.